MUMBAI: Jet Airways on Friday deferred a crucial proposal to amend its Articles of Association (AoA) after concerns were raised by the market regulator Securities and Exchange Board of India. The airline also reported that losses for the January-March quarter widened by more than 66% to Rs 495.53 crore as against a net loss of Rs 298.12 crore in the year ago period largely due to higher operational costs.

Earlier in the day, at the extraordinary general meeting, the shareholders of the company approved its proposal to sell 24% stake to Abu Dhabi-based Etihad Airways for close to Rs 2,058 crore.

The decision to defer the proposal to amend its Articles of Association, which was part of the agenda for the company's EGM, came after clarifications were sought by Sebi and a few shareholders. A company official later told newsmen that the airline was waiting for "regulatory clarity", before it again decides to approach shareholders for their consent on amending the articles.

Jet's shares fell 3.69% or Rs 21.55, a share to Rs 562.70, even as the BSE Sensex gained 30 points to close at 19,704.33, though the results were announced after trading hours.

In a recent communication to Jet Airways, the regulator expressed reservations regarding the shareholders' agreement entered into by the two partners that gives Etihad substantial management rights and the right to nominate three directors on the board of the Indian carrier and to decide senior management positions, ET had reported earlier this week.

Jet Airways chairman Naresh Goyal along with his investment firm registered in Isle of Mann, a tax haven, control 80% of Jet equity, which eventually will be transferred to the main promoter to meet regulatory norms. Goyal on Friday picked up over 29% stake in the private carrier from another promoter entity for about Rs 1,434 crore.

ET had reported earlier this week that Sebi has written to Jet Airways, raising questions over parts of the agreement signed by Jet with Etihad Airways as they appear to confer substantial management rights to the Middle-Eastern airline. The deal gives Etihad greater access into the domestic aviation market and domestic airline companies are expected to follow suit by bringing foreign airlines as potential stakeholders in their companies.

Goyal said the resolution to amend the Article of Association will be taken up after getting necessary regulatory approvals for the deal. Jet Airways and Etihad have maintained that the substantial ownership and effective control will remain with Indian nationals. Goyal will be the non-executive chairman of the company holding 51% stake.

Goyal also told shareholders that the investment from Etihad is only expected to improve the Indian carrier's profitability and lower the costs. Goyal did not meet the waiting media personals and left through a back door of the auditorium.

"The investment from Etihad will help us to deleverage and grow in a sustainable manner," Goyal said while addressing the shareholders.

The amendments to the AoA included Etihad-nominated directors on Jet board being non liable for any default or failure of the company in complying with the provisions of any applicable laws.Â

"The commercial agreement with Etihad will help us to expand network, reduce costs and increase profitability," Goyal added.

Following the deal, Naresh Goyal-led promoter group can nominate four directors (Indian citizens), while Etihad would nominate three directors. Besides, seven would be independent directors. The amendments also barred the promoters from transferring any shares without a prior written consent of Etihad, among other conditions.

Naresh Goyal also informed the shareholders that he will dilute 5% of his shareholding in an offer-for-sale (OFS) either on May 29 or 30. According to Sebi rules, the company after going for an OFS, it would have to wait for at least 12 weeks, before it decides to enlist a new investor with a fresh issue of shares.

Jet Airways will receive a total cash infusion of $750 million as part of the deal in both debt and equity. "This cash infusion will help the airline to reduce debt from $2.1 billion to $1.5 billion," KG Vishwanath, VP-Investor relations, told shareholders.

The total income for the country's second-largest airline by market share also fell 3% to Rs 3,921 crore as against Rs 4,042 crore during the last quarter of the previous financial year. Jet's income from operations also fell marginally to Rs 3,840 crore as against Rs 3,842.2 crore during the quarter.